May 3, 2014
The stalled Kunioon coal mine development near Kingaroy – put on hold in 2010 – is still an important part of the Stanwell portfolio, visitors to the corporation’s Tarong North Power Station were told this week.
Stanwell Corporation CEO Richard Van Breda, speaking at a “Behind The Fence” event for local business leaders, said there were 670 million tonnes of measured reserve at Kunioon, and Stanwell was looking at “options”.
Kunioon mine was originally going to be used to replace Meandu mine as the main coal supply for the Tarong and Tarong North power stations.
It had been estimated 10 million tonnes of coal per year could be extracted from the open cut mine for a total of 25 years. The coal would have been transported to the nearby power stations by conveyor belt.
However in July 2010, then Tarong Energy CEO Helen Gluer confirmed the corporation’s activities at Kunioon had been scaled back following investigations which revealed other sources of economically viable coal were available at the existing Meandu mine.
The decision came as a shock to local businesses which had been expecting a major new infrastructure development in the region following the acquisition of a number of farms and tourism businesses to make way for the project.
Mr Van Breda said on Thursday the coal at Kunioon was not suitable for export as it was a similar grade to the Meandu resource.
However a possible long-term option could be converting coal to liquid fuel.
He ruled out coal seam gas (CSG) as an alternative use for the resource.
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The “Behind The Fence” mornings are a Stanwell Corporation initiative to brief members of the local community on the group’s activities.
Previous events have been held at the Meandu coal mine and Tarong Power Station.
Thursday’s briefing at Tarong North power station coincided with a mini-overhaul at the station which will cost about $8 million and involve 200 people.
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Some of the other topics covered at the briefing:
- Stanwell is proud of improvements in its workforce injury toll. Across the while corporation, 42 injuries have been recorded in the nine months to March, compared with 126 in the comparable period last year.
- The wholesale electricity market is still challenging and the market over-supplied; Stanwell is being forced to compete with solar power and other subsidised sources of energy
- Electricity demand is still dropping; March was the second lowest month for demand in the past eight years; however some of the new industries coming online such as CSG will increase demand
- Stanwell now considers itself more than just a power generator as it also trades gas and coal
- To remain competitive, Stanwell’s workforce has been reduced between 35-40 per cent over the past two years
- Stanwell has turned a profit out of its generating business for the first time in five years
- The mothballed Unit 4 at Tarong Power Station is expected to be back on line in July; Unit 2 will potentially join it early next year
- A “fourth fleet” has been put on at Meandu Coal Mine to cater for the extra demand for coal; this means 50 new jobs with roughly 85 per cent coming from the local community; the current fleets are headed by a 300 tonne excavator, a 500 tonne excavator and an 800 tonne excavator; another 300 tonne excavator will be brought in for the new fleet
- Expansion of the Meandu mine to the south is being finalised; an area to the north-east will be a focus of the corporation’s next drilling program
- Four new apprentices will be put on at Tarong Power Station in 2015 (and 10 across all of Stanwell in Queensland)
- A contract is about to be finalised with United Group Limited to provide a “one-stop shop” approach to contractors across the Stanwell group; UGL’s preference will be to employ local residents
- Stanwell is also in discussions with SunWater re Boondooma Dam; the corporation is the largest user of water from the dam and is interested in taking over ownership of the water pipeline
- The pilot carbon capture project at Tarong using algae has been suspended due to funding issues
Turning to the ongoing speculation over the possible sale of Stanwell to help pay off government debt, Mr Van Breda repeated an earlier statement by Stanwell executives that “it doesn’t matter” in the end who owns Stanwell, ie. whether it remains a government-owned corporation, is sold to another company or is listed on the ASX.
However, whatever happened he hoped the corporation would not be split up.
“I would like to think that there is a benefit in keeping the portfolio together,” he said.
[UPDATED with correction. An earlier version stated the properties at Kunioon had been acquired compulsorily]
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